British court rules on private parking penalties

Government & Law

On the 23rd April 2015, London’s Court of Appeal delivered a judgement that will have a concerning impact on parking charges that can be levied by private parking companies.

In a unanimous decision, London's Court of Appeal ruled that an £85 "parking fine" for overstaying the time limit, in what was otherwise a free car park, was a legal and valid charge. This decision is bad news for consumers around the world and good news for big businesses who stand to profit from this decision.

In April 2013, Fish and Chip shop owner Mr Barry Beavis had overstayed the parking time limit at a private car park at a shopping center car park in Chelmsford, England. The car park, managed by parking company Parking Eye Ltd, allowed for two hours of free parking, but Mr Beavis’ vehicle was on the property for a total of 2 hours and 56 minutes. A few days later, Parking Eye Ltd sent Mr Beavis a £85 invoice in the mail. But Mr Beavis decided not to pay this private parking ticket and held out for some time. Then in 2014, Parking Eye Ltd took Beavis to the County Court. It is history that Mr Beavis lost his County Court case and was ordered to pay the £85 parking ticket. Mr Beavis appealed immediately and the order was stayed, pending the appeal to London’s Court of Appeal.

That Court of Appeal case was finally heard in February 2015. Mr Beavis, represented by a barrister acting pro bono, claimed that the amount of £85 constituted a penalty and was therefore void. In contract law established around the word, if a contract is breached by one party, then the other party to the contract can only be required to pay the damages caused by that breach so as to put the other party back into the position they had been in had the contract not been breached. By way of example, if the parking fee was £10, and the driver had not paid the £10, then ordinarily the driver could only be sued for the missing £10, plus perhaps a reasonable administration charge of £10 (or perhaps at most £20). However, anything more than that amount has in the past been considered to be a penalty which in the past has made a £85 charge void under contract law. Usually, only statutory authorities such as Councils and Police are permitted to charge penalties as a means of deterring certain types of behavior, such as illegal parking.

And so the Court of Appeal case centred around the question of whether the £85 charge can be considered a penalty, when the actual cost of parking was zero. The court ultimately said that whilst £85 was more than the loss incurred by Parking Eye Ltd:
- It was not extravagantly so, and therefore the court did not consider £85 to be a penalty.
- It didn’t fall outside of the Unfair Terms in Consumer Contracts Regulations 1999.
and so the court ruled in favour of the company, and against Mr Beavis.

However, Barry Beavis has been allowed to appeal the decision to England’s Supreme Court. Mr Beavis hasn’t lodged the appeal yet, but he is currently raising funds for the appeal. We are expected to know within a few weeks whether he gets his appeal lodged. If it does get lodged within the time limit, then it will another one to two years before consumers find out the result of that appeal as things move slowly in the Supreme Court.

Background

Private parking companies in Britain operate their car parks using ANPR systems (Automated Number Plate Recognition) that use cameras and software to identify and record the registration numbers of cars that enter and leave the car park parks, along with the date and time. The companies can then calculate the amount of time that each vehicle spent inside the car park. If it exceeds the time limit specified on the signs at the car park entrances, then the car park company applies to Britain’s Driver and Vehicle Licensing Agency for the name and address of the registered owner of the vehicle. In 2014/15 private parking companies in Britain made over 3 million requests for owner details. The car park company then sends a parking charge notice (PCN) to the registered owner’s address asking them to pay the amount specified on the signs (£85 in this case). If the registered keeper doesn’t pay, then the company takes the matter to court. Prior to the court of appeal’s judgement, the registered owner was, as often as not, able to beat the charge in court. However, the decision of the Court of Appeal has now altered this legal landscape.

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